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CBP Identifies Country of Origin of Elliptical Exercise Machines

Friday, October 24, 2014
Sandler, Travis & Rosenberg Trade Report

U.S. Customs and Border Protection has issued a final determination (HQ H248696) concerning the country of origin of various elliptical exercise machines and option package kits that may be offered to the U.S. government under an undesignated government procurement contract. This determination was issued Oct. 16 and any party-at-interest may seek judicial review of it by Nov. 24. CBP issues country of origin advisory rulings and final determinations as to whether an article is or would be a product of a designated country or instrumentality for the purposes of granting waivers of certain “Buy American” restrictions in U.S. law or practice for products offered for sale to the U.S. government.

The items at issue are 23 ellipticals produced in Taiwan, each of which consists of a base assembly and a console assembly, as well as three option package kits that can be added onto certain ellipticals. The base assembly includes 450 Taiwanese components, 10 Chinese components and one U.S. component, while the console assembly includes 31 Taiwanese components and two Chinese components. The bases and consoles are produced in Taiwanese factories through an extensive assembly process, after which they are brought together and tested in Taiwan, packaged separately in Taiwan to facilitate shipment, and then shipped from Taiwan to the U.S.

CBP concludes that the assembly operations performed in Taiwan, using a majority of Taiwanese components, substantially transform the base and console assemblies into the exercise machines. As a result, the country of origin of those machines is Taiwan for purposes of U.S. government procurement. Furthermore, CBP concludes that the three option package kits retained their respective countries of origin (Taiwan and China) because they were already in their final form before being packaged into the option kit.

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